The ACCA-sponsored research – which analysed the financial reporting of 21 PFI projects (eight roads and 13 hospitals) with annual costs of £210 million – revealed several difficulties when accounting for PFI contracts.
‘ACCA’s research raises serious questions about the accountability of PFI projects, in particular the ability of current accounting methods to provide adequate transparency,’ said Andy Wynne, head of public sector issues at ACCA.
‘A major issue is that PFI debts and assets are kept off the Government’s balance sheet. The NAO reports that the future value of PFI payments to which central government is committed is over £105 billion – around a third of the current level of Government debt.
‘Given this extensive commitment, PFI assets and liabilities should, in many cases, be included on the Government’s balance sheet.’
The ACCA says this makes it difficult to measure the financial performance of the contracts, which, in turn, creates problems for their monitoring and evaluation, and raises serious concerns about their public accountability.
According to reports in The Financial Times, the cost of delivering these projects may well lead to cuts in public services and/or tax rises.
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